GLEN BURNIE, Md., Nov. 01, 2019 (GLOBE NEWSWIRE) — Glen Burnie Bancorp (“Bancorp”) (NASDAQ: GLBZ), the bank holding company for The Bank of Glen Burnie (“Bank”), announced today net income of $606,000, or $0.21 per basic and diluted common share for the three-month period ended September 30, 2019, as compared to net income of $439,000, or $0.16 per basic and diluted common share for the three-month period ended September 30, 2018.
Bancorp reported net income of $1,060,000, or $0.38 per basic and diluted common share for the nine-month period ended September 30, 2019, compared to $1,172,000, or $0.42 per basic and diluted common share for the same period in 2018. At September 30, 2019, Bancorp had total assets of $383.4 million. Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 109th consecutive quarterly dividend on November 1, 2019.“We are pleased with our performance during the third quarter and believe we are well positioned to take advantage of opportunities in our market area while serving our customer base despite the challenging economic and competitive environment,” stated John D. Long, President and CEO. “We continue to invest in technology and infrastructure improvements that enable us to remain competitive in the rapidly changing technological environment. Our strong fundamental performance was somewhat offset by the cost of these investments. However, we maintained our relentless focus on expense reduction in other areas as we work to drive efficiencies through the Bank and improve our profitability while delivering the outstanding customer service that differentiates our Bank in our local markets.”“Looking forward, we continue to seek opportunities to further reduce our cost structure as we work to achieve an efficiency ratio more in-line with our peers. In addition, a favorable credit environment combined with our outstanding credit quality, disciplined loan pricing and a beneficial balance sheet structure, allowed us to reduce the provision for loan losses by $385,000 or 156.6%, for the three-month period ended September 30, 2019 as compared to the same period last year. Headquartered in the dynamic Northern Anne Arundel County market, we believe our Bank is well positioned with excellent asset quality and capital levels, a stable net interest margin, and an experienced and seasoned executive team. We remain deeply committed to serving the financial needs of the community through the development of new loan and deposit products.”Highlights for the First Nine Months of 2019Bancorp focused on organic growth opportunities in the first nine months of 2019, as average loan balances increased $11.0 million or 3.9%, as compared to the same period in 2018, and the pace of loan originations slowed. Bancorp has strong liquidity and capital positions that provide ample capacity for future growth, along with the Bank’s total regulatory capital to risk weighted assets of 13.18% at September 30, 2019, as compared to 12.86% for the same period of 2018.Return on average assets for the three-month period ended September 30, 2019 was 0.63%, as compared to 0.43% for the three-month period ended September 30, 2018. Return on average equity for the three-month period ended September 30, 2019 was 6.77%, as compared to 5.04% for the three-month period ended September 30, 2018. Lower provision for loan losses offset by lower net interest income and higher income tax expense primarily drove higher returns for the three-month period ended September 30, 2019.The book value per share of Bancorp’s common stock was $12.52 at September 30, 2019, as compared to $11.86 per share at September 30, 2018.At September 30, 2019, the Bank remained above all “well-capitalized” regulatory requirement levels. The Bank’s tier 1 risk-based capital ratio was approximately 12.36% at September 30, 2019, as compared to 11.98% at September 30, 2018. Liquidity remained strong due to managed cash and cash equivalents, borrowing lines with the FHLB of Atlanta, the Federal Reserve and correspondent banks, and the size and composition of the bond portfolio.Balance Sheet ReviewTotal assets were $383.4 million at September 30, 2019, a decrease of $28.0 million or 6.8%, from $411.4 million at September 30, 2018. Investment securities were $64.8 million at September 30, 2019, a decrease of $19.2 million or 22.9%, from $84.0 million at September 30, 2018. Proceeds from the Bank’s sale of investment securities in 2019 were used to offset the decrease in deposits and borrowings (see below), and fund the Bank’s increase in loan originations during 2018. Loans, net of deferred fees and costs, were $283.9 million at September 30, 2019, a decrease of $11.1 million or 3.8%, from $295.0 million at September 30, 2018.Net deferred tax assets decreased $1.9 million and accrued taxes receivable increased $1.0 million from September 30, 2018 to September 30, 2019 resulting from a reduction in tax accruals related to sequestration of the refundable portion of our alternative minimum tax (AMT) credit carryforward. On January 14, 2019, the IRS clarified that refundable AMT credits under Section 53(e) of the Internal Revenue Code are not subject to sequestration for taxable years beginning after December 31, 2017. Therefore, the full amount of the AMT credit carryover is expected to be refunded to the Company.Other assets decreased $0.7 million due to the $0.7 million decrease in the fair value of swap derivative positions.Total deposits were $325.3 million at September 30, 2019, a decrease of $11.5 million or 3.4%, from $336.8 million at September 30, 2018. Interest-bearing deposits were $213.8 million at September 30, 2019, a decrease of $15.1 million or 6.6%, from $228.9 million at September 30, 2018. Total borrowings were $20.0 million at September 30, 2019, a decrease of $20.0 million or 50.0%, from $40.0 million at September 30, 2018.Stockholders’ equity was $35.37 million at September 30, 2019, an increase of $2.03 million or 6.1%, from $33.34 million at September 30, 2018. The decrease in accumulated other comprehensive loss associated with net unrealized losses on the available for sale bond portfolio and increase in retained earnings and stock issuances under the dividend reinvestment program, offset by an increase in unrealized losses on interest rate swap contracts drove the overall increase in stockholders’ equity.Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and other real estate owned (“OREO”), represented 1.34% of total assets at September 30, 2019, as compared to 0.75% for the same period of 2018. The increase in nonaccrual loans drove the 0.59% increase in nonperforming assets as percentage of total assets from September 30, 2018 to September 30, 2019.Review of Financial ResultsFor the three-month periods ended September 30, 2019 and 2018Net income for the three-month period ended September 30, 2019 was $606,000, as compared to $439,000 for the three-month period ended September 30, 2018.Net interest income for the three-month period ended September 30, 2019 totaled $3.1 million, as compared to $3.3 million for the three-month period ended September 30, 2018. Average loan balances decreased $7.0 million or 2.38% to $286.9 million for the three-month period ended September 30, 2019, as compared to $293.9 million for the same period of 2018. Average balances on interest-bearing deposits and investments decreased $21.2 million or 21.7%, to $76.6 million for the three-month period ended September 30, 2019, as compared to $97.8 million for the same period of 2018.Net interest margin for the three-month period ended September 30, 2019 was 3.43%, as compared to 3.34% for the same period of 2018. Lower average balances and interest rates on borrowed funds primarily drove year-over-year results. The average balance on borrowed funds decreased $14.5 million while the yield decreased 0.09% from 2.28% to 2.19%, when comparing the three-month periods ending September 30, 2018 and 2019, respectively. The provision for loan losses for the three-month period ended September 30, 2019 was a negative provision of $139,000, as compared to a provision of $246,000 for the same period of 2018. The decrease was driven primarily by $437,000 of lower net charge offs. As a result, the allowance for loan losses was $2.31 million at September 30, 2019, representing 0.81% of total loans, as compared to $2.46 million, or 0.83% of total loans at September 30, 2018 and is consistent with the improved credit quality of our loan portfolio.Noninterest income for the three-month period ended September 30, 2019 was $391,000, as compared to $331,000 for the three-month period ended September 30, 2018, an increase of $60,000 or 18.1%. Higher ATM interchange fees associated with seasonal business drove the quarter-over-quarter increase.For the three-month period ended September 30, 2019, noninterest expense was $2,856,000, as compared to $2,859,000 for the three-month period ended September 30, 2018, a decrease of $3,000 or 0.10%. The primary contributors to the $3,000 decrease, when compared to the three-month period ended September 30, 2018 were decreases in salary and employee benefits cost, data processing and item processing services and FDIC insurance costs, offset by increases in occupancy and equipment expenses including investments in technology and infrastructure improvements and legal, accounting and other professional fees.For the nine-month periods ended September 30, 2019 and 2018Net income for the nine-month period ended September 30, 2019 was $1,060,000, as compared to net income of $1,172,000 for the nine-month period ended September 30, 2018.Net interest income for the nine-month period ended September 30, 2019 totaled $9.41 million, as compared to $9.35 million for the nine-month period ended September 30, 2018. Average loan balances increased $11.0 million or 3.9%, to $294.0 million for the nine-month period ended September 30, 2019, as compared to $283.0 million for the same period of 2018. Average balances on interest-bearing deposits and investments decreased $22.1 million or 22.0%, to $78.1 million for the nine-month period ended September 30, 2019, as compared to $100.2 million for the same period of 2018.Net interest margin for the nine-month period ended September 30, 2019 was 3.38%, as compared to 3.26% for the same period of 2018. Higher yields on interest-earning assets offset by higher cost of funds were the primary drivers of year-over-year results, as the yield on interest-earning assets increased 0.12% from 3.79% to 3.91% and the cost of funds increased 0.01% from 0.55% to 0.56% for the nine-month periods ending September 30, 2018 and 2019, respectively.The provision for loan losses for the nine-month period ended September 30, 2019 was $65,000, as compared to $601,000 for the same period of 2018. The decrease for the nine-month period ended September 30, 2019 as compared to the same period in 2018 primarily reflects lower net charge offs. Noninterest income for the nine-month period ended September 30, 2019 was $955,000, as compared to $1,204,000 for the nine-month period ended September 30, 2018. The results for the first nine-months of 2018 include gains on redemptions of BOLI policies of $308,000.For the nine-month period ended September 30, 2019, noninterest expense was $8.9 million, as compared to $8.7 million for the nine-month period ended September 30, 2018. The primary contributors to the $0.2 million increase, when compared to the nine-month period ended September 30, 2018 were increases in salary and employee benefits costs, occupancy and equipment expenses, legal, accounting and other professional fees, litigation settlement costs, and bank robbery and fraud losses, partially offset by decreases in data processing and item processing services, FDIC insurance costs and loan collection costs.Glen Burnie Bancorp InformationGlen Burnie Bancorp is a bank holding company headquartered in Glen Burnie, Maryland. Founded in 1949, The Bank of Glen Burnie® is a locally-owned community bank with 8 branch offices serving Anne Arundel County. The Bank is engaged in the commercial and retail banking business including the acceptance of demand and time deposits, and the origination of loans to individuals, associations, partnerships and corporations. The Bank’s real estate financing consists of residential first and second mortgage loans, home equity lines of credit and commercial mortgage loans. The Bank also originates automobile loans through arrangements with local automobile dealers. Additional information is available at www.thebankofglenburnie.com.Forward-Looking StatementsThe statements contained herein that are not historical financial information, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, which could cause the company’s actual results in the future to differ materially from its historical results and those presently anticipated or projected. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. For a more complete discussion of these and other risk factors, please see the company’s reports filed with the Securities and Exchange Commission.
For further information contact: Jeffrey D. Harris, Chief Financial Officer
410-768-8883 106 Padfield Blvd
Glen Burnie, MD 21061
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